The Fed raises rates for the first time since 2023, to 3.75%-4%
On 16 September 2026 the Federal Reserve raised its benchmark rate by a quarter point, to 3.75%-4%, with a unanimous vote. What it said, and what comes next on 27-28 October.
The Federal Reserve raised the target range for the federal funds rate by a quarter of a percentage point on 16 September 2026, to 3.75%-4%. It was the first increase since 2023, and the vote of the Federal Open Market Committee was unanimous, 12 to 0.
In its statement the Committee said that inflation "remains elevated" and that the increase should help bring it back to the 2% goal sooner. It described economic activity as expanding at a solid pace, with resilient domestic spending, strong productivity growth and robust capital investment, and noted elevated uncertainty, partly linked to geopolitical developments. Job growth, it said, has matched the growth of the workforce, and the unemployment rate has barely changed.
With the decision the Fed also raised the interest rate it pays on reserve balances to 3.90% and the primary credit rate to 4%, effective 17 September.
The next test arrives quickly. September consumer prices, published on 14 October, showed inflation rising to 3.7% a year, from 3.4% in August. The Committee meets again on 27 and 28 October, and once more on 8 and 9 December.
Why it matters: the policy rate sets the cost of money for the whole economy. Higher rates raise the yield investors can earn without risk, which usually weighs on the valuations of growth companies, including the private technology companies tracked on this site.